SOCIAL RESPONSIBILITY 2020 - Nordstrom Supplier

2 0 2 0RESPONSIBILITY

Factory Guide to Implementing the Nordstrom Partnership GuidelinesSeptember 2020

SOCIAL

TABLE OF CONTENTS

SECTION PAGE(S)

Foreword 3

Introduction 4

Essential Elements of Compliance 5

Key Operating Principles 6

Trade Compliance Commitment 7

Partnership Guidelines Overview 8-11

Ratings Overview & Definitions 12

Corrective Action Plan & Documents 13

Legal Requirements 14

Change of Control 15

Subcontracting 16

Documentation & Inspection 17

Anti-Corruption 18

Customs Compliance 19

Child Labor 20-21

Forced Labor 22-23

Harassment & Abuse 24

Wages & Benefits 25-26

Hours & Overtime 27-28

Health & Safety 29-33

Non-Discrimination 34-35

Freedom of Association 36-37

Environment 38

Conflict Minerals & The Kimberley Process 39

Animal Welfare 40

Intellectual Property 41

For additional information, please contact:

Nordstrom Social Responsibility

1617 6th Avenue, Suite 1000

Seattle, Washington 98101

USA

[email protected]

This document offers guidance on effectively implementing the Nordstrom Partnership Guidelines.

Factories contracted for Nordstrom Product Group production are required to comply with the

Nordstrom Partnership Guidelines, this Factory Guide, the applicable laws and regulations of the

United States and the country in which they do business. Factories are audited to ensure

compliance. This guide is intended to enable agents, manufacturers, and factories to understand

and incorporate Nordstrom Partnership Guidelines into daily operations.

CONFIDENTIAL: This document contains proprietary, trade secret, and confidential information

which are the property of Nordstrom, Inc. This document and the contents may not be duplicated

or

disclosed to any other party without express authorization of Nordstrom, Inc.

FOREWORD

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mailto:[email protected]

INTRODUCTION

Corporate Social Responsibility is a fundamental element of Nordstrom culture. We value

strong supplier relationships and want to partner with those that share our commitment to

producing products through the use of ethical business practices. Nordstrom Partnership

Guidelines are the foundation for these relationships and ensure our suppliers embrace the

goals of compliance and work to improve working conditions. Our Partnership Guidelines

are based on International Labor Organization (ILO), United Nations Guiding principles,

governmental and policy group recommendations. All factory management must also be

aware of applicable local laws, and adhere to local law or our Partnership Guidelines,

whichever offers a greater level of protection for workers. While we acknowledge the

cultural differences that exist among suppliers, this guidance is designed to standardize

global expectations.

Our Partnership Guidelines provide the basis for measuring supplier Social Responsibility

performance. Compliance with our Partnership Guidelines should not be viewed as a mere

requirement of doing business with Nordstrom Product Group but should aid factories in

implementing sustainable improvements. Furthermore, Nordstrom Product Group believes

open and honest communication is the key to successful relationships. For this reason, we

operate under the model of transparency and continuous improvement, which encourage

candid, ongoing discussion of compliance challenges and allows sustainable progress to be

made within factories.

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• Comprehensive recruiting, hiring, and termination policies and procedures to ensure compliance with local laws and our Partnership Guidelines

• Qualified personnel to manage and implement each Partnership Guidelines and ensure compliance with local laws

• Effective management of production capacity and efficiency

• Open and ongoing discussion of compliance challenges between factory management and Nordstrom Product Group

• Communication of Partnership Guidelines, factory policies, and local laws to workers in simple terms, in the local language, as part of new-hire orientation, working manual and periodic training

• Best practice: Worker and

management education

plan

• Best practice: Videos,

announcements, posters,

and other graphic aids

• Complete and accessible worker files, including valid photo identification and age documentation; or any pertinent identification documents accepted under local law that verify employee’s eligibility to work.

• Maintain all documentation and licenses necessary to demonstrate compliance, on factory premises for at least 12 months

• Effective communication channels and grievance procedures, including worker committees.

• Example: Sexual harassment committees (where required)

• Active worker engagement in implementation of all Partnership Guidelines, as appropriate

• Best practice: Worker

health and safety

committee

ADMINISTRATION DOCUMENTATION ENGAGEMENT

Effective implementation of our Partnership Guidelines requires the development of robust

management systems. A management system is a collection of processes and procedures that

ensures a factory meets requirements. Listed below are components of strong factory

management systems that position factories for success in implementing our Partnership

Guidelines. They include:

ESSENTIAL ELEMENTS OF COMPLIANCE

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KEY OPERATING PRINCIPLES

Our Partnership Guidelines serve as the foundation of our Social Responsibility program, while our Key Operating principles provide a model for working successfully and openly with our suppliers. Our Key Operating principles of transparency and continuous improvement encourage candid, ongoing discussion of compliance challenges and allow sustainable progress to be made within factories.

Trade Compliance Commitment

NPG expects its factories, and any party working on their behalf, to not do business either directly or indirectly with any person or territory that is designated as a Sanctioned Person or Sanctioned Territory by the U.S. Government. This includes ensuring that Sanctioned Person’s do not have any interest of any nature whatsoever in your factory, or any other entity working on your behalf.

Transparency

Transparency is fundamental to meaningful partnerships between Nordstrom Product Group and our suppliers. Transparency means allowing all Nordstrom Product Group representatives, including Third Party Monitors, full access to the factories with which we work, including additional facilities such as dormitories. It also means allowing Nordstrom Product Group representatives and/or Third-Party monitors to inspect wages, working hours, and management systems records within a factory. When a factory is not transparent, it negatively affects a factory's rating. Transparency can be achieved through honest and open communication between factory management and Nordstrom Product Group. A transparency rating is given to a facility after an audit has been conducted, based on the auditor’s findings. The ratings are listed and defined below:

• Transparent: Indicates all records are accurate and transparent

• Non-transparent: Inconsistent: Indicates all or some records are inaccurate or falsified – Ex: A worker had broken a needle on June 7, 2020 (Sunday), which was recorded on the broken needle record.

however, the provided attendance records showed that the factory did not operate on Sunday

• Non-transparent: Inconclusive: Indicates suspicions of falsified records, without any evidence that can be shared with the factory – Ex: The factory management claimed they had installed a CCTV system, but the CCTV system was broken recently

and could not be checked for worker's actual practice. There was also no computer attendance record provided for review.

Pre-Assessment Calls:

All factories are encouraged to partake in a pre-assessment call as this has proven to help the factories to be prepared for the audit day, however, pre-assessment calls are only mandatory for previous non-transparent factories. Factories who are required to pay for a pre-assessment call will be notified to do so by our third-party monitors when scheduling the audit.

Continuous Improvement

Nordstrom Product Group operates within the continuous improvement model. Continuous improvement means a commitment to achieving compliance through realistic and measurable plans that incorporate operational and economic realities. A product of transparency and cooperation, continuous improvement is critical to creating incentives for sustainability and improving the lives of individuals who make our product. Continuous improvement plans are based on mutually agreed-upon milestones and regular progress reporting to Nordstrom Product Group.

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PARTNERSHIP GUIDELINES OVERVIEW

LEGAL REQUIREMENTS: Nordstrom expects all its business suppliers ("suppliers" as used in these Partnership Guidelines must include all agents, vendors, manufacturers, factories and subcontractors) to comply with all applicable laws and regulations of the United States and the countries in which they do business, including the country of manufacture or exportation. In addition, Nordstrom expects its suppliers to comply with applicable sections of the Fair Labor Standards Act (Department of Labor Monitoring Guide), International Labor Organization (ILO) Conventions and the United Nations (UN) Guiding Principles on Business and Human Rights. Suppliers who produce or provide products must also ensure that all such products are accurately labeled and clearly identified as to their country of origin and content. The language to be used in our business relationship, including for purposes of notice, must be English. For more information on these and other requirements with which suppliers must comply, please visit www.nordstromsupplier.com.

CHANGE OF CONTROL:

Nordstrom Product Group suppliers must notify Nordstrom in writing if ownership, location, sale or purchase of any factory that houses Nordstrom production changes. Any of the above changes requires the factory to undergo the New Supplier setup process.

SUBCONTRACTING:

Nordstrom Product Group suppliers must not subcontract any portion of the manufacturing process without written approval prior to production. As a condition of approval, subcontractors must agree to comply with the Partnership Guidelines.

DOCUMENTATION & INSPECTION:

Documentation:Nordstrom will review and may terminate its relationship with any supplier who unable to demonstrate its compliance with the Partnership Guidelines.

Inspection (Nordstrom Product Group ONLY):Nordstrom Product Group monitors compliance with its Partnership Guidelines and Factory Guide. This includes onsite inspections of suppliers' factories. Factories must be transparent and maintain all accurate documentation on file. Factories must authorize Nordstrom representatives and designated third-party monitors to engage in announced and unannounced monitoring activities to ensure compliance, including allowing confidential worker interviews to be conducted with all genders.

ANTI-CORRUPTION:

Nordstrom expects all of its suppliers to comply with all applicable laws relating to bribery, money laundering and/or corruption, including, but not limited to, the U.S. Foreign Corruption Practices Act (FCPA), Corruption of Foreign Public Officials Act of Canada and the U.K. Bribery Act (Anti-corruption Laws). Suppliers must further have and maintain policies, programs, trainings and record-keeping practices in place to comply with all applicable Anti-corruption Laws and prevent unlawful payments made for the purpose of obtaining or retaining business. If requested, suppliers must provide Nordstrom with reasonable assistance to perform any activities required by any government or agency in a relevant jurisdiction for the purpose of anti-corruption compliance.

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http://www.nordstromsupplier.com/


CUSTOMS COMPLIANCE:

Suppliers will comply with U.S. and Canada Customs importing laws and, in particular, will establish programs and maintain documentation to support country of origin production verification and preferential trade claims. Suppliers will comply with international supply chain security requirements and criteria per U.S. Customs-Trade Partnership Against Terrorism (C-TPAT) and Canada Partners In Protection (PIP). Suppliers are subject to audits and corrective action plans as applicable.

CHILD LABOR:

Suppliers will not employ anyone: under the age of 15, under the minimum age as established by

applicable law in the country of manufacture, under the age of completing compulsory education,

whichever is older. Suppliers must not expose anyone under the age of 18 to situations that are

hazardous, unsafe or unhealthy, and will provide adequate protection from exposure to such conditions

and materials. Suppliers must also have established procedures for age verification as part of their hiring

process. Refer to ILO Conventions 138 and the UN Convention on the Right of the Child

FORCED LABOR:

Nordstrom will not conduct business with any supplier that uses involuntary labor of any kind; including

prison labor; indentured labor; bonded labor; labor obtained through human trafficking, coercion,

slavery; or labor defined as forced labor under any United States law. Practices that restrict employees'

freedom of movement or ability to voluntarily terminate employment are prohibited. Suppliers must not

withhold identity documents, financial guarantees or other valuable items, as means to bind workers to

employment are not tolerated. Refer to ILO Conventions 29 & 105.

HARASSMENT & ABUSE:

Suppliers must treat every person with dignity and respect. All workers must not be subject to physical,

sexual, psychological or verbal harassment or abuse. Suppliers must not use monetary fines as a

disciplinary practice. Furthermore, people of all genders must be free to voice concerns to Nordstrom or

Nordstrom-appointed staff without fear of retaliation by supplier management. Refer to UN Guiding

Principles 29 & 31.

WAGES & BENEFITS:

Wages, overtime and legally mandated benefits must be paid regularly, on time, with documentation and

accordance to applicable laws. Employers must pay at least the minimum wage, the industry wage or the

wage negotiated in a collective agreement, whichever is higher. Suppliers must not deduct wages that are

not provided for by applicable local law. Suppliers are encouraged to pay employees of all genders a

wage that meets basic needs and provides discretionary income. Refer to ILO Conventions 95 & 131.

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HOURS & OVERTIME: Suppliers should not allow working hours that exceed the applicable legal limit, or 60 hours per week,

whichever is less. Overtime work should be voluntary and compensated at the rate required by local

law. Suppliers must ensure their workers are not penalized, punished or dismissed for refusing to work

more than the regular work limits. Workers should be allowed one day off in seven. Suppliers must keep

accurate time records. Suppliers, and any subcontractors with whom they work in the United States,

must follow the U.S. Department of Labor's Preventative Measures to Avoid Receiving Hot Goods

guidelines. Refer to ILO Convention 14.

HEALTH & SAFETY: Suppliers must provide safe, hygienic, and healthy working conditions. This includes written standards

that comply with local laws. This includes safety standards related to building structure, electrical safety,

fire safety, chemical safety, sanitation, emergency preparedness, first aid, personal protective equipment

and other safety policies. Refer to ILO Convention 187.

NON-DISCRIMINATION: Suppliers must not discriminate in employment practices, including recruiting, hiring and promoting

qualified people of all backgrounds, regardless of sex, race, color, national origin, social or ethnic origin,

religion, age, marital status, partnership status, pregnancy, parental status, physical or mental disability,

political opinion, personal characteristics and beliefs, sexual orientation, gender identity or expression or

any basis protected by local law. Refer to ILO Conventions 100 & 111.

FREEDOM OF ASSOCIATION: Suppliers will respect all workers' rights (regardless of gender) to freedom of association and collective

bargaining. Refer to ILO Conventions 87, 98, and 154.

ENVIRONMENT: Suppliers must comply with all applicable environmental laws and regulations in the country of operation.

In addition, suppliers must have policies and procedures in place to manage and minimize environmental

impacts to energy, air, emissions, waste and water, and to safely store, prevent or mitigate releases of

chemicals and hazardous materials.

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CONFLICT MINERALS & THE KIMBERLEY PROCESS:

Suppliers must comply with applicable laws and regulations relating to responsible sourcing, including

the sourcing of Conflict Minerals and diamonds. Section 1502 of the Dodd-Frank Act relates to the

responsible sourcing of Conflict Minerals, which include: tin, tantalum, tungsten and gold (collectively

"3TG") mined in conditions of armed conflict and human rights abuses in the Democratic Republic of the

Congo (DRC) or its adjoining countries. Under Section 1502, applicable suppliers must confirm the

source of 3TG used in their products. Suppliers agree to satisfy any reporting requirements they have

under Section 1502 and to also provide information requested by Nordstrom so that Nordstrom may

satisfy its reporting obligations under Section 1502. The Kimberley Process resolution relates to the

responsible sourcing of diamonds and requires that the supplier guarantees that diamonds are conflict-

free based on personal knowledge or a written guarantee provided by the supplier of the diamonds and

stated on all invoices. See our Conflict Mineral Policy (PDF).

ANIMAL WELFARE:

Suppliers must adhere to codes of practice that meet or exceed International, National and State Government, and best practice standards for animal welfare. Nordstrom will no longer sell products made with genuine animal fur or exotic animal skins by the end of 2021. See our Exotic Animal Skin and Fur Free Policy for more details.

INTELLECTUAL PROPERTY: Nordstrom respects the intellectual property (IP) rights of others and expects the same of its suppliers.

Unauthorized use of any third parties' intellectual property, including copying of third parties’ designs or

prints, is not acceptable. Any authorized use of another's IP and the transfer of proprietary information

must be handled in a secure manner that protects the IP and rights of the IP owner, Nordstrom and its

suppliers. Nordstrom’s trademarks, logos and proprietary work may only be used to fulfill contracted

services and shall not be released to any other party unless preapproved in writing by Nordstrom.

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http://i.nordstromimage.com/images/default/shop/image/shops/cares/2015/0222/Nordstrom-conflict-minerals-policy-statement.pdf

RATINGS OVERVIEW & DEFINITONS

Rating Rating Definition Example Findings

Zero Tolerance (ZT)

Violations that are the highest risk and pose a major threat to the well-being of workers.

Third Party Monitors report these violations to Nordstrom Product Group within 24 hours.

• Child labor

• Slave, bonded, or forced labor

• Physical and sexual harassment and

abuse

• Bribery

• Home workers

• Critical health and safety

Demands Immediate

Action (DIA)

Violations that are high risk and pose a threat to the well-being of workers.

Third Party Monitors report these violations to Nordstrom Product Group within 24 hours.

• Historical child labor

• Verbal or financial harassment and

abuse

• Discrimination

• Denied or partial access for

monitoring

• Unauthorized subcontracting

• Unauthorized dumping of

environmental, chemical, or solid

waste

Needs Major Improvement

(NMI)

Violations that infringe upon worker entitlements or signal inadequate management systems and recordkeeping.

• Wages and benefits

• Hours and overtime

• Rest day

• Legal requirements

• Freedom of association

• Serious health and safety

Needs Improvement

(NI)

Violations that are low risk and pose a minor threat to the well-being of workers.

• Minor health and safety

• Minor documentation

Satisfactory (SAT)

Violations are not discovered. • No violations or minor concerns noted

• Factory complies with Partnership

Guidelines and local laws

Please note that this is not an exhaustive list of findings for each rating. For more examples of findings, please refer to the section on each Partnership Guideline later in this guidebook.

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Every issue found during an audit will be categorized s one of the below ratings:

CORRECTIVE ACTION PLAN & DOCUMENTS

Following an audit, Nordstrom Product Group partners with factories to develop a Corrective Action Plan (CAP). CAP’s include audit findings and recommended actions for the factory to take to make improvements. Factories will provide Nordstrom Product Group with verification of the completion of each action item either through photographic evidence or by providing other relevant documents, all in alignment with a timeline agreed to by Nordstrom Product Group and the factory.

CAP’s allow us to quickly improve minor compliance matters, while also addressing the root causes of more systemic and complex issues gradually. All issues raised on a CAP must be documented with the Nordstrom Product Group Social Responsibility Team in order to track progress over time, increase factory transparency, and increase compliance with our Partnership Guidelines.

In the following section of this Factory Guide, required remediation documentation will be denoted by the following methods:

The following requirements refer to either photographic verification or documentation:

Size, Clarity, File Type❑ All photographs must be clear and easily visible. ❑ All written documents (time sheets, worker hour logs, licenses, receipts, etc.) and photographs

should be scanned into e-mails or uploaded and attached as individual attachments so that all writing is legible, and image is not blurry.

❑ All documents must be one of the following types: .JPEG, .DOC, .PNG, .PDF, .XLS, .ZIP, .PPT, .AVI, .MOV.

Location❑ The location of each remediation must be clear in all photographs. For example, if a fire extinguisher

needed to be added in a cafeteria it must be evident that the image of the newly installed fire extinguisher was taken in the cafeteria. This can be achieved by taking a close up shot of the remediation for detailed inspection and a shot from across the room to illustrate the location.

Documentation of Products❑ Photographs or scanned copies of receipts of all new products purchased for a resolution must be

included. All receipts should accurately reflect how many people would be using the product. ❑ An image of new products should also be included with individuals actively using the new products in

the location they would typically be used.

Documentation of Training ❑ All trainings must be documented with a sign in sheet of the workers in attendance.❑ Photographs of trainings should be illustrated with an image of the room while the training is taking

place.

DocumentationPhotographic Verification

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LEGAL REQUIREMENTS

PARTNERSHIP GUIDELINE REQUIREMENTS

Nordstrom expects all its business suppliers ("suppliers" as used in these Partnership Guidelines must

include all agents, vendors, manufacturers, factories and subcontractors) to comply with all applicable

laws and regulations of the United States and the countries in which they do business, including the

country of manufacture or exportation. In addition, Nordstrom expects its suppliers to comply with

applicable sections of the Fair Labor Standards Act (Department of Labor Monitoring Guide),

International Labor Organization (ILO) Conventions and the United Nations (UN) Guiding Principles on

Business and Human Rights. Suppliers who produce or provide products must also ensure that all such

products are accurately labeled and clearly identified as to their country of origin and content. The

language to be used in our business relationship, including for purposes of notice, must be English. For

more information on these and other requirements with which suppliers must comply, please visit

www.nordstromsupplier.com.

SUPPLIER REQUIREMENTS❑ Factories must have a valid and non-expired business license. (Rated NMI)❑ Factories must have appropriate documentation associated with country of origin, the movement of

product from one factory to another (Outward Processing Agreements-OPA), and production records of merchandise available upon request. (Rated NMI)

❑ All labor laws must be followed. This includes situations where foreign contract workers are employed. (Rated NMI)

❑ Wage, legal, and policy documentation must be posted in a prominent location in the workers’ language. (Rated NMI)

❑ Factories must maintain worker records and signed labor contracts, where required by law, to demonstrate compliance. (Rated NMI)

Rating If

FoundExample Finding Example Remediation

Target

TimelineMethod

DIA

The factory does not have appropriate identification of business, location and other information identified on the industrial license.

All current licenses must reflect the relationship between the supplier, factory, and home and in-factory worker.

One month

NMI

The factory does not keep signed labor contracts per local law.

The factory must create a system that maintains records of labor contracts. When complete, the factory must send copies to Nordstrom Product Group for review andverification.

One - two months

EXAMPLE NON-COMPLIANCES AND CORRECTIVE ACTION PLAN

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https://www.dol.gov/whd/flsa/

https://www.nordstromsupplier.com/Content/SC_Manual/Garment%20Monitoring%20Guide_2_.pdf

http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12000:0::NO:::

http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf

http://www.nordstromsupplier.com/

CHANGE OF CONTROL


Nordstrom Product Group suppliers must notify Nordstrom in writing if ownership, location, sale or purchase of any factory that houses Nordstrom production changes. Any of the above changes requires the factory to undergo the New Supplier setup process.

SUPPLIER REQUIREMENTS❑ Factories must provide advance, written notice to Nordstrom Product Group if the

ownership of the factory changes. (Rated DIA)❑ Factories must provide advance, written notice to Nordstrom Product Group if the factory

relocates. (Rated DIA)❑ Suppliers must update the Nordstrom Supplier Questionnaire for any new address,

ownership and contact information. (Rated NI)

Rating If


Target

TimelineMethod

DIA

The factory failed to notify Nordstrom Product Group of change of control or factory ownership.

The factory must notify Nordstrom Product Group in writing if the ownership of the factory changes and go through the audit approval process.

24 hours -four weeks to conduct audit

DIA

The factory failed to notify Nordstrom ProductGroup of factory location change.

The factory must notify Nordstrom Product Group in writing if the location of the factory changes. Send updated NSQ and go through the audit approval process.

24 hours -four weeks to conduct audit


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SUBCONTRACTING


Nordstrom Product Group suppliers must not subcontract any portion of the manufacturing process without written approval prior to production. As a condition of approval, subcontractors must agree to comply with the Partnership Guidelines.

SUPPLIER REQUIREMENTS❑ Factories must disclose all subcontracting to Nordstrom prior to production placement or

relocation. (Rated DIA)❑ All work must be performed by documented workers. (Rated DIA)❑ Prior to order placement, factories must receive Nordstrom Product Group approval to use

subcontractors. Factories must confirm subcontractors will comply with the Partnership Guidelines and local laws prior to production placement and monitor subcontractors to ensure compliance on an ongoing basis. Subcontractors may need to be audited by a 3rd

party prior to production placement. (Rated DIA)❑ Subcontracting facilities must be disclosed on the Nordstrom Supplier Questionnaire. (Rated

NI)❑ All sewing, finishing/packaging, and packing locations (excluding casting and plating) that are

subcontracted must be audited.

Rating If


Target

TimelineMethod

DIA

Factory “X” has subcontracted the cut and sew portion of production to an unknown factory without knowledge or approval by Nordstrom Product Group.

Production must only take place at factories approved by Nordstrom Product Group. The subcontractor must submit a Nordstrom Supplier Questionnaire (NSQ) and undergo an audit to verify complianceimmediately.

24 hours


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DOCUMENTATION & INSPECTION


Documentation:Nordstrom will review and may terminate its relationship with any supplier who unable to demonstrate its compliance with the Partnership Guidelines.Inspection (Nordstrom Product Group ONLY):Nordstrom Product Group monitors compliance with its Partnership Guidelines and Factory Guide. This includes onsite inspections of suppliers' factories. Factories must be transparent and maintain all accurate documentation on file. Factories must authorize Nordstrom representatives and designated third-party monitors to engage in announced and unannounced monitoring activities to ensure compliance, including allowing confidential worker interviews to be conducted with all genders.

SUPPLIER REQUIREMENTS❑ Factories must grant access to all records, workers and facilities for auditing purposes on behalf of

Nordstrom Product Group. (Rated DIA)❑ Factory management must participate in the opening and closing audit meetings to discuss the

purpose of the audit and violations found. (Rated NMI)❑ Factories must provide access to all documentation and factory premises, including dormitories.

(Rated DIA)❑ Factories must have appropriate factory staff with authorized access to records available for all social

audits.❑ Factories must maintain all required documentation onsite for 12 months.❑ Factories must allow for worker interviews to be conducted

Rating If


Target

TimelineMethod

DIA

The factory denies access to auditors when they arrive toaudit.

The auditor alerts Nordstrom Product Group of the denied accessimmediately. Production may not begin until the factory is audited and approved by Nordstrom Product Group. The factory must pay for the denied access, in addition to the new audit in which they must allow the audit to occur. If the factory refuses, Nordstrom Product Group will eliminate business with the supplier and seek an alternative sourcing option.

24 hours

NMI

During the audit, the factoryprovides auditors with incomplete factory and worker documents.

The factory must retain all records related to the business, worker personnel files and wages paid for 12 months. A re-audit paid by the factory must be done to verify compliance. This finding is also rated non-transparent and inconclusive.

Two -four weeks


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ANTI-CORRUPTION


Nordstrom expects all of its suppliers to comply with all applicable laws relating to bribery, money laundering and/or corruption, including, but not limited to, the U.S. Foreign Corruption Practices Act (FCPA), Corruption of Foreign Public Officials Act of Canada and the U.K. Bribery Act (Anti-corruption Laws). Suppliers must further have and maintain policies, programs, trainings and record-keeping practices in place to comply with all applicable Anti-corruption Laws and prevent unlawful payments made for the purpose of obtaining or retaining business. If requested, suppliers must provide Nordstrom with reasonable assistance to perform any activities required by any government or agency in a relevant jurisdiction for the purpose of anti-corruption compliance.

Rating If


Target

TimelineMethod

ZT

The factory owner or other factory representative bribes auditor to overlook Social Compliance (or other issues) and Quality (or testing issues) at factory.

Nordstrom Product Group eliminates business with the factory and seeks alternative sourcing option.

24 hours

ZTAgent is requiring the factory to pay additional fee for services rendered, such as quality inspections, component sourcing, etc.

Nordstrom Product Group will be notified by 3rd party auditor and Nordstrom will work with the agent to ensure ethical practices

24 hours

ZTThe auditor discovers permits at factory are fake; factory tries to bribe auditor to approve permit legitimacy.

Nordstrom Product Group eliminates business with the supplier and seeks alternative sourcing option.

24 hours

ZT

The auditor tells factory owner or other factory representative he will overlook Social Compliance issues (or other issues) found at factory if given money. The factory owner obliges, giving auditor a bribe of any kind.

Notify Nordstrom Product Group of the auditor’s name.

Nordstrom Product Group eliminates working with that Auditor and audit is rescheduled at expense of the 3rd party auditor.

24 hours

ZT

The auditor tells factory owner or other factory representative he will overlook Quality issues (or testing issues) found at factory if given a bribe of any kind. The factory owner obliges, giving auditor a bribe of any kind.

Notify Nordstrom Product Group of the auditor’s name.

Nordstrom Product Group eliminates working with that Auditor and audit is rescheduled at expense of the 3rd party auditor.

24 hours

ZT

The factory management threatensthe auditor with violence or retaliation due to negative audit findings.


24 hours

SUPPLIER REQUIREMENTS❑ All suppliers must comply with local and/or other applicable anti-corruption laws and regulations.

(Rated ZT)


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CUSTOMS COMPLIANCE


Suppliers will comply with U.S. and Canada Customs importing laws and, in particular, will establish programs and maintain documentation to support country of origin production verification and preferential trade claims. Suppliers will comply with international supply chain security requirements and criteria per U.S. Customs-Trade Partnership Against Terrorism (C-TPAT) and Canada Partners In Protection (PIP). Suppliers are subject to audits and corrective action plans as applicable.

SUPPLIER REQUIREMENTS❑ When Customs and Border Protection or Canada Border Service Agency is not satisfied with the country of

origin being claimed by the commercial documentation (particularly the Certificate of Origin declaration), they can request records/documents from Nordstrom Product Group proving the origin of a shipment. As Customs’ time limits are short for us to provide this documentation to Customs Nordstrom Product Group will require that the documentation be emailed (and sent via courier) within 5 days of agent/supplier receipt of the request. Any more information related with Customs Compliance are found at http://www.nordstromsupplier.com/NPG/uscustoms.html

❑ Factory should review Nordstrom Product Group International Supply Chain Security Reference Guide, which is intended to educate factory regarding C-TPAT requirements. This document can be viewed at the following location: https://www.nordstromsupplier.com/Nordstrom Product Group/index.htm.

Rating If


Target

TimelineMethod

NI

The factory does not have

written procedures in

place for reporting and

neutralizing unauthorized

entry into containers or

container storage areas.

The factory should have written

procedures for reporting and neutralizing

unauthorized entry into containers or

container storage areas.

30 days

NI

There is no system to

monitor and track the

timely movement of all

incoming and outgoing

cargo conveyances.

The factory must have an integrated

system to monitor and track the

movement of all incoming and outgoing

cargo conveyances.

30 days

NI

The factory's container

inspection procedure does

not include the 7-point

inspection process.

The factory must perform a seven-point

inspection process designed to verify the

physical integrity of the container.

30 days

NI

The factory does not have

written procedures in

place to indicate how seals

are to be controlled and

affixed to loaded

containers.

Container integrity must be maintained

to protect against the introduction of

unauthorized material and/or persons.

Factory-loaded full containers must have

written and verifiable processes for the

requirements outlined below (including

seals).

30 days


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http://www.nordstromsupplier.com/NPG/uscustoms.html

https://www.nordstromsupplier.com/NPG/index.htm

CHILD LABOR


Suppliers will not employ anyone: under the age of 15, under the minimum age as established

by applicable law in the country of manufacture, under the age of completing compulsory

education, whichever is older. Suppliers must not expose anyone under the age of 18 to

situations that are hazardous, unsafe or unhealthy, and will provide adequate protection from

exposure to such conditions and materials. Suppliers must also have established procedures for

age verification as part of their hiring process. Refer to ILO Conventions 138 and the UN

Convention on the Right of the Child

SUPPLIER REQUIREMENTS❑ Factories are prohibited from employing any worker under the age of 15. Where local law

specifies a minimum working age higher than 15, all workers must be at or above the legal minimum age. (Rated ZT)

❑ Where local law specifies a mandatory schooling age, factories may not employ persons below the age required. (Rated ZT)

❑ Underage visitors on the production floor are prohibited at all times. (Rated ZT)❑ Children are prohibited from assisting in any part of the production. (Rated ZT)❑ Childcare facilities are prohibited from physically overlapping with work areas. (Rated ZT)❑ All requirements regarding juvenile workers (as defined by local law) must be followed. As

defined by the International Labor Organization, juvenile workers are prohibited from working at night or conducting hazardous job duties/tasks. If applicable, parental and educational releases must be kept within the worker’s file. (Rated ZT)

❑ The discovery of Historical Child Labor will require verification that no one is currently employed under the age of 15. Where local law specifies a minimum working age higher than 15, all workers must be at or above the legal minimum age. (Rated DIA)

❑ Factories must have a hiring policy documented that includes a minimum age of 15 or older, if established by local law. (Rated NMI)

❑ Factories must have age-verification procedures that are effectively implemented. All worker files must contain copies of National Identification Cards and photo identification submitted by applicants. (Rated NMI)

20

Rating If


Target

TimelineMethod

ZT

In country “X”, the legal minimum working age is 14 years old. A worker in factory “X” is found to be 14 years old, with verified documentation.


24 hours

ZT

In country “X”, the legal minimum working age is 16 years old (higher than the Nordstrom Product Group 15-year-old requirement). Workers in factory “X” are found to be 15 years old, with verified documentation.


24 hours

ZT

In country “X”, laws conflict; allowing juveniles to work after the age of 15 but must remain in school until the age of 16. A worker in factory “X” is 15 years old and not in school, with verified documentation.


24 hours

DIA

In factory “X”, it was noted that historical child labor was utilized, but no current child labor found during audit.

Factories must establish a recruitment policy that prevents child workers from employment and show the recruitment policy is enforced. The recruitment policy must include specific steps taken to ensure National Identification Cards and photo identification are cross-checked to actual employees during the hiring process.

24 hours

NMI

The factory does not have adocumented policy on the minimum hiring age.

The factory must implement a policy and train staff to ensure workers meet minimum age requirements.

24 hours

NMI

In factory “X”, juveniles (15-18) work the same hours, including overtimeas adult workers, which is verified through worker interviews.

Identify juvenile workers and communicate the required legal employment restrictions to staff. Create/maintain juvenile registry and implement juvenile employment restrictions (e.g. required written permission from parent/guardian, special record-keeping, required medical exams, restricted work hours (no OT) and job restrictions (no hazardous tasks/job duties).

24 hours- threemonths

NMI

A child is discovered in the factory. Upon further review, it is verified they were on school holiday, visiting their parent.

The child must be removed immediately. Thefactory must establish a policy that prohibits children in the workplace and ensure thepolicy is communicated to staff and workers.

24 hours

NMI

In factory “X”, juveniles have been found on the glue line at a footwear factory.

Factories must not expose juveniles to hazardous tasks/job duties. Factories must create and maintain a juvenile registry and implement juvenile employment restrictions.

24 hours


CHILD LABOR


21

FORCED LABOR


Nordstrom will not conduct business with any supplier that uses involuntary labor of any kind;

including prison labor; indentured labor; bonded labor; labor obtained through human

trafficking, coercion, slavery; or labor defined as forced labor under any United States law.

Practices that restrict employees' freedom of movement or ability to voluntarily terminate

employment are prohibited. Suppliers must not withhold identity documents, financial

guarantees or other valuable items, as means to bind workers to employment are not

tolerated. Refer to ILO Conventions 29 & 105.

SUPPLIER REQUIREMENTS❑ Workers must have access to toilet facilities and drinking water at any time. (Rated DIA)❑ Workers must have the ability to leave at any time, including end of their regular shift,

regardless of production status. (Rated DIA)❑ Workers must not pay fees or make deposits, associated with employment agents,

recruitment, migration, or advanced monetary deposits. (Rated ZT) ❑ Factories must work with employment agents to ensure workers are informed of basic terms

of employment prior to leaving home country or province. These terms must include as a minimum employment position, workplace name & address, living accommodations, terms and conditions in native language. (Rated ZT)

❑ Overtime work must be strictly voluntary and never deprive workers of freedom and adequate sleep. (Rated ZT)

❑ Workers must have the right to terminate employment at any time, regardless of contract terms, without excessive notice periods or substantial fines for terminating their employment contracts, are prohibited. (Rated NMI)

❑ All labor contracts must meet legal requirements. (Rated NMI)❑ Security Guards must be trained to ensure no worker is forced to work in an unsafe

environment (Rated DIA)❑ The use of Uzbekistan, Turkmenistan and Xinjiang - China cotton is prohibited. (Rated ZT)

22

FORCED LABOR


Rating If


Target

TimelineMethod

ZT

During an audit, workers state they are not working at the factory voluntarily. Upon further review, the allegations are confirmed.


24 hours

ZT

In factory “X”, foreign migrant workers are required to sign a contract stating resignation is not an option. For example, if a worker resigned within two years, they would be fined an amount equivalent to three months pay.

The clause must be removed immediately, with the contract revised. Termination ofemployment must not result in a fine or loss of previously earned wages. Workers should sign the revised contract in their local language and must be given a copy for their records.

24 hours

DIA

The factory requires workers to submit original legal identification documents (i.e. original copies of birth certificates or National Identification Cards) or deposit moneyand fines, so resignation cannot be easily obtained from the factory.

The factory must establish a policy that does not require workers to deposit any legal identification documents (original copies of birth certificates or National Identification Cards) or the deposit of money, which may prevent workers from easily resigning from the factory. The factory must return all deposits, make duplicate copies and return all held documentation back to the workers.

24 hours

DIA

Workers feel they work in a climate of intimidation created by the presence of guards, restricting their freedom of movement throughout the factory.

The guards must discontinue the practice immediately and be trained on corrective behaviors. The guards must be monitored for compliance.

24 hours

DIA

Workers have to ask permission from their supervisor to get a drink of water or use toilet facilities.

Workers must have access to toilets and drinking water at all times,without the need to seek permission.

24 hours


23

HARASSMENT & ABUSE


Suppliers must treat every person with dignity and respect. All workers must not be subject to physical, sexual, psychological or verbal harassment or abuse. Suppliers must not use monetary fines as a disciplinary practice. Furthermore, people of all genders must be free to voice concerns to Nordstrom or Nordstrom-appointed staff without fear of retaliation by supplier management. Refer to UN Guiding Principles 29 & 31.

SUPPLIER REQUIREMENTS❑ There must not be any physical, verbal, or nonverbal sexual advances or exploitation in the factory.

(Rated ZT)❑ There must not be any threats or physical forms of discipline or harassment in the factory. (Rated ZT)❑ Security pat-downs must not be performed by guards or factory personnel of the opposite sex from

the worker. (Rated DIA)❑ There must not be any screaming, threatening, demeaning, or abusive language used in the factory.

(Rated NMI)❑ Factories must not use monetary fines as a disciplinary practice. (Rated NMI)

Rating If


Target

TimelineMethod

ZT

A supervisor touches a worker making them uncomfortable.


24 hours

DIA

The factory policy states monetary fines are acceptable to discipline workers for violating company guidelines (e.g. eating at workplace, etc.).

Monetary fines are prohibited. Thepolicy must be removed immediately,with the guidelines revised. The factorymust communicate the updated policyto HR and staff.

24 hours

NMI

If late to work, workers are publically reprimanded, and docked pay after arrival time.

The factory must discontinue the practice immediately and be trained on corrective behaviors. The factory must implement effective management follow-up on reported grievances.

24 hours

NMI

One supervisor shouts at workers whenany mistakes are made.

The supervisor must discontinue the practice immediately and be trained on corrective behaviors. The factory must implement effective management follow-up on reported grievances.

24 hours

NI

There are inconsistencies in departments on disciplinary procedures. For example, one worker in the sewing department made a small mistake and was fired. A worker made a small mistake in the packing department, but was only given a written warning.

Supervisors and workers should be educated on the disciplinary procedures, and they should be carried out consistently in the factory. Theprocedures must include an escalating series of verbal and written warnings prior to suspension or dismissal. (Note: Disciplinary procedures must also be in writing and posted).

24 hours


24

25

WAGES & BENEFITS


Wages, overtime and legally mandated benefits must be paid regularly, on time, with documentation and accordance to applicable laws. Employers must pay at least the minimum wage, the industry wage or the wage negotiated in a collective agreement, whichever is higher. Suppliers must not deduct wages that are not provided for by applicable local law. Suppliers are encouraged to pay employees of all genders a wage that meets basic needs and provides discretionary income. Refer to ILO Conventions 95 & 131.

SUPPLIER REQUIREMENTS❑ Factories must ensure wages are paid directly to workers and not diverted. (Rated ZT)❑ Wages and overtime must be paid regularly and on time. (Rated DIA)❑ Legally mandated benefits must be paid regularly, on time, with documentation and

accordance to applicable laws and kept onsite for 12 months. (Rated NMI)❑ Factories must pay at least the minimum wage, the industry wage or the wage negotiated in a

collective agreement, whichever is higher. (Rated NMI)❑ Factories must ensure regular and overtime premium wages meet legal or industry minimum

standards. (Rated NMI)❑ Employing temporary workers in order to avoid legal benefits and wage increases is

prohibited. (Rated NMI)❑ Factories must comply with applicable laws and industry standards relating to social security

and insurance. (Rated NMI)

26

WAGES & BENEFITS


Rating If

FoundExample Finding Example Remediation Target Timeline Method

DIA

The factory fails to pay legal minimum wages.

Wage payment must meet legal requirements.


DIA

Delayed payment of wages and overtime resulting in worker not being paid at least monthly (includes resigned workers)

Wage payment must meet legal requirements.


DIA

Factory “x” did not have anyone available to review wage and benefit documentation.

Factories must have staff available for audit record review.

Immediately

NMI

Workers are not paid for all overtime hours worked.

All overtime hours worked mustmeet legal requirements.


NMI

Workers are not provided with insurance as required by law.

The factory must meet the legal benefit requirements and educate all workers on necessary updates.


NMI

Wage records fail to separate overtime hours from standard (straight time) hours, and/or fail to correctly record and itemize wages, hours, overtime hours, benefits and withholdings on the payroll register.

All hours worked must be recorded and the payroll register should be itemized to indicate regular hours, overtime hours, net pay, gross pay, and proper deductions.



27

HOURS & OVERTIME


Suppliers should not allow working hours that exceed the applicable legal limit, or 60 hours per week, whichever is less. Overtime work should be voluntary and compensated at the rate required by local law. Suppliers must ensure their workers are not penalized, punished or dismissed for refusing to work more than the regular work limits. Workers should be allowed one day off in seven. Suppliers must keep accurate time records. Suppliers, and any subcontractors with whom they work in the United States, must follow the U.S. Department of Labor's Preventative Measures to Avoid Receiving Hot Goods guidelines. Refer to ILO Convention 14.

SUPPLIER REQUIREMENTS❑ Factory production quotas must not result in mandatory overtime. The factory must restrict

the daily, weekly and quarterly working hours to be within the prescribed legal limits. (Rated ZT)

❑ Factories must ensure workers hours and overtime hours are within the legal limit, or less than 60 total hours per week, whichever is lower. (Rated NMI)

❑ Prior to employment, the factories must inform workers, both verbally and in writing, of its policy on overtime work and overtime compensation rates. (Rated NMI)

❑ Off-clock work is prohibited. (Rated NMI)❑ Factories must provide workers with 1 day of rest after 6 consecutive days of work. (Rated

NMI)❑ Work must only be performed on the production floor and not in the dormitory or eating

facility. (Rated NMI)

28

HOURS & OVERTIME


Rating Example Finding Example Remediation Target Timeline Method

ZT

Piece rate workers reported high

production quotas; stating they

cannot leave the factory until the

quotas are completed, which is

resulting in mandatory late or all night

shifts. Workers also report they sleep

in the facility.

Nordstrom Product Group

eliminates business with the

supplier and seeks alternative

sourcing option.

24 hours

NMI

Overtime hours could not be verified

due to the following inconsistencies:

1.) Based on broken needle records in

sampling room, 2 workers had worked

on June 9th (Sunday). However, the

provided barcode attendance records

indicated that related workers rested

on that day.

The factory must provide true,

complete, and accurate

records to the Nordstrom

Product Group

representatives and/or 3rd

party auditors during the audit

process to ensure the

compliance level of the factory

can be confirmed.

The factory must be

transparent about challenges

they may have, in an effort to

create a realistic and gradual

improvement plan.

Continuous

Improvement

NMI

It was noted, in manual attendance

records in May, that 6 out of 10

workers worked 21 consecutive days

from May 2nd to May 31st.

The factory must ensure

workers have one day off in

seven. The factory must be

transparent about challenges

they may have, in an effort to

create a realistic and gradual

improvement plan.

Continuous

Improvement

NMI

It was noted that from January to April

60% of workers worked 70-80 hours

per week.

The factory must send documentation of an improvement plan (e.g. detailed spreadsheet or within a document format) highlighting monthly progress of decreased hours until local law and/or until Partnership Guidelines requirements are met.

Continuous

Improvement


29

HEALTH & SAFETY


Suppliers must provide safe, hygienic, and healthy working conditions. This includes written standards that comply with local laws. This includes safety standards related to building structure, electrical safety, fire safety, chemical safety, sanitation, emergency preparedness, first aid, personal protective equipment and other safety policies. Refer to ILO Convention 187.

SUPPLIER REQUIREMENTS

Electrical Safety

❑ Power cords must be grounded. (Rated NI)❑ All electrical panels with circuit breakers must be covered, with each switch properly labeled in the

local language. (Rated NI)❑ Electrical cords must be in good condition, and not spliced, frayed, or exposed. (Rated NI)❑ Emergency candles or flashlights must be kept on the premises for use in the event of a power

outage. (Rated NI)Fire Safety❑ Factory must have 1 fire extinguisher for every 25 workers, evenly distributed and within close reach

of each worker. (Rated NI)❑ Fire extinguishers must be clear of obstruction. (Rated NI)❑ Fire extinguishers must be mounted on walls or columns and clearly-marked. (Rated NI)❑ All rooms with combustible materials must have fire equipment. (Rated NI)❑ Fire extinguishers must be checked monthly, fully-charged, and labeled by fire type (Rated NI):

❑ Wood, paper, textiles: Water; Class A fire extinguisher for ordinary combustibles; Fire blanket

❑ Solvent, grease, oil, petroleum: Class B fire extinguisher for flammable liquid, gas, or grease❑ Wiring, electrical equipment: Class C fires extinguishers for wiring or electrical equipment;

Fire Blanket❑ All fire equipment must be inspected by the fire department or outside agency every 6 months, or

according to local law, with inspection dates noted. (Rated NI)❑ 5% - 10% of workers both male and female from each department must be trained in proper

handling and use of fire equipment. (Rated NI)❑ Operating instructions must be posted in the local language near the fire extinguishers. (Rated NI)❑ Timed Fire and other evacuation drills and training must be conducted and documented every 6

months with photos and signatures. (Rated NI)❑ Evacuation training must include awareness of exit routes and designated gathering areas outside

the factory. (Rated NI)❑ Fire alarms must be audible and visible throughout the entire factory. (Rated NI)

30

HEALTH & SAFETY


SUPPLIER REQUIREMENTS (Continued)Sanitation/Toilets❑ Toilet facilities must be available on each floor. (Rated NI)❑ Toilets must be cleaned and disinfected daily. (Rated NI)❑ Toilets must be plumbed with running water. (Rated NI)❑ Basic supplies such as toilet paper, soap, and hand towels must be provided. (Rated NI)❑ Toilets must have privacy stalls. (Rated NI)❑ Toilet area must be well-lit and well-ventilated. (Rated NI)❑ Clean water for washing must be near the toilets. (Rated NI)❑ A sufficient number of toilets must be provided, accessible, and separated by gender. (Rated NI)❑ Workers per shift/toilets required by gender (Rated NI):

❑ 1 – 15: 1

❑ 13 – 35: 2

❑ 36 – 55: 3

❑ 56 – 80: 4

❑ 81 – 110: 5

❑ 111 – 150: 6

❑ 150 +: 1 additional toilet for each additional 40 workers

Emergency Exits❑ All emergency exits must be unlocked during working hours. Preventing workers from safely exiting the

building in case of an emergency is prohibited. (Rated ZT)❑ There must be at least 2 unlocked and accessible emergency exits on each floor of each building. Exit doors

must open outward and be wide enough to ensure safe and speedy evacuation. (Rated NMI)❑ An emergency exit must be 61 meters (200 feet) or less from any worker. (Rated NI)❑ Emergency exits and signage must be visible up to 30.5 meters (100 feet). (Rated NI)❑ Emergency lights must be installed above all emergency exits and stairwells. (Rated NI)❑ Egress paths to all emergency exits must be maintained at a minimum width of 72 cm (28 inches) and must be

kept clear of obstructions.

First Aid and Medical Services❑ Workers must be trained in basic first aid procedures. (Rated NI)❑ A hospital, medical facility location must be in close proximity to the factory, or on-site trained staff located at

the factory. (Rated NI)❑ Annual medical checkups must be provided if required by law. (Rated NI)❑ Medical procedures must be performed by a licensed physician in a sterile and secure environment. (Rated NI)❑ If injections are provided to workers, they must be administered by a licensed medical practitioner and

recorded. (Rated NI)❑ Proper procedures regarding needle use and disposal must be followed. (Rated NI)❑ There must be at least 1 first aid kit per 100 workers located on each floor. (Rated NI)❑ Minimum contents include Adhesive bandages; Absorbent pads; Antiseptic; Latex gloves; Burn treatment;

Medical adhesive tape; Scissors; Tweezers; Rubbing alcohol; Eye wash. (Rated NI)❑ First aid kits must be routinely inspected and restocked when necessary. (Rated NI)❑ First aid kits must be accessible and unlocked at all times. (Rated NI)❑ Blood-borne pathogen kits must be available in the event of injury. (Rated NI)❑ Emergency eye wash stations must be installed in areas of risk. (Rated NI)❑ Controlled substances must never be freely accessible to workers. (Rated NI)

31

HEALTH & SAFETY


SUPPLIER REQUIREMENTS (Continued)Personal Protective Equipment (PPE)❑ Personal protective equipment must be provided to workers, including goggles, gloves, and masks, etc. and

regular training conducted on proper use. (Rated NI)❑ Earplugs must be provided to workers subjected to continuous noise exceeding 85 decibels. (Rated NI)Water❑ Factories must provide free water access to workers without hazardous materials that could cause severe

health risks if ingested. (Rated ZT)Dormitories❑ Dormitories must meet local size standards with individual worker living space never less than 2.25 square

meters (20-25 square feet). (Rated NI)❑ Drinkable water must be available at all times on each floor. (Rated NI)❑ Emergency exits must be unlocked at all times. (Rated NI)❑ Electricity must be available at all times. (Rated NI)❑ Toilet facilities must be available on each floor. (Rated NI)❑ Toilets must be plumbed, separated by gender, have privacy stall doors, and be cleaned daily. (Rated NI)❑ Residents must not be charged excessive room and board fees. (Rated NI)❑ Residents must be able to come and go freely in accordance with dormitory policies. (Rated NI)❑ Sleeping areas must be segregated by gender, unless family or partners. (Rated NI)❑ Each resident must have his or her own bed/sleeping cot. (Rated NI)❑ Each resident must have his or her own secure personal storage locker. (Rated NI)❑ The dormitory structure must be clean, structurally-sound, well-ventilated, well-lit, and provide shelter from

weather elements. (Rated NI)❑ Trash/Debris must be cleared daily. (Rated NI)❑ Separate wash basins must be available for laundry. (Rated NI)❑ Each floor must have 2 well-marked emergency exit stairwells. (Rated NI)❑ Smoking must be restricted to designated areas. (Rated NI)❑ Any cooking must be restricted to designated areas. (Rated NI)❑ A designated cooking/kitchen area must be provided near the dormitory. (Rated NI)❑ Stairwells must have adequate lighting, proper handrails, emergency lighting, and be free of clutter. (Rated NI)❑ An evacuation plan must be posted on each floor of the dormitory in the local language. (Rated NI)❑ 2 fire extinguishers must be available in different locations on each floor of the dormitory. (Rated NI)❑ Off site dormitories, managed by factory, must follow same requirements as onsite dormitories. Machine Safety❑ All machinery must be equipped and maintained as required by manufacturer’s instructions. (Rated NI)❑ Service logs must be maintained for all machinery. (Rated NI)❑ Broken needle logs must be maintained and include all broken needle pieces with the date, machine number,

and operator name. (Rated NI)❑ Front and side guards must be placed on all abrasive wheels. (Rated NI)❑ Needle, pulley, and eye guards must be placed on all sewing and button machines. (Rated NI)❑ Knife guards must be placed on all cutting machines. (Rated NI)❑ Finger guards must be placed on all automatic welt pocket machines. (Rated NI)❑ Machines must have an individual power shut-off switch or emergency release within the operator’s reach.

(Rated NI)

❑ Tagging guns must be individually labeled and must not be shared. (Rated NI)

32

HEALTH & SAFETY


SUPPLIER REQUIREMENTS (Continued)Ventilation❑ Factories must be adequately heated/cooled to ensure a comfortable environment. (Rated NI)❑ Air circulation systems must be installed and operational. (Rated NI)❑ Exhaust fans must be installed and operational during work hours. (Rated NI)❑ Exhaust fans must be cleaned routinely to ensure maximum air quality benefits. (Rated NI)❑ Sufficient ventilation must be provided in areas where heat is generated, or workers engage in

strenuous activity. (Rated NI)Documentation❑ Factories must post health and safety information required by law in the local language. (Rated NI)❑ Emergency information must be posted in a prominent location. (Rated NI)❑ Factories must have copies of all health and safety permits on-site. (Rated NI)❑ Factories must maintain all safety and accident reports on-site for one year. (Rated NI)❑ Safety trainings, meetings, and drills must be documented, and records maintained. (Rated NI)❑ All first aid treatments and substances dispensed must be documented and maintained. (Rated NI)Production Floor Safety❑ Aisles must be clear at all times. (Rated NI)❑ Adequate space must be provided between workstations to allow freedom of movement. (Rated NI)❑ Primary aisles must be wide enough for 2 workers to walk comfortably side-by-side. (Rated NI)❑ Secondary aisles must be wide enough for 1 worker to walk comfortably. (Rated NI)❑ Evacuation plans must be posted prominently on each work floor, displaying current location, nearest

exits, and fire extinguishers. (Rated NI)❑ Workstations must be adequately lit. (Rated NI)❑ Production floors must be marked with an evacuation path using arrows or lines. (Rated NI)❑ Trash/debris must be cleared from the production floor regularly. (Rated NI)❑ Empty pallets must be stored flat and not stacked dangerously high. (Rated NI)❑ Workers must be appropriately dressed to minimize potential safety risks (hair tied back, no loose

clothing, etc.). (Rated NI)❑ The factory must perform an illumination and noise analysis by an accredited company with findings and

improvements for implementation. (Rated NI)Elevators❑ Elevators must be serviced and inspected regularly by licensed technicians. (Rated NI)❑ Elevator doors must be shut unless elevator car is present. (Rated NI)❑ Load limits and emergency instructions must be posted in each elevator. (Rated NI)❑ Freight elevator shaft must have markings in place to prevent injury. (Rated NI)Food Preparation❑ Food preparation area must be separate from the production floor. (Rated NI)❑ Food preparation area must be cleaned and disinfected daily. (Rated NI)❑ Eating facilities must be covered to protect workers. (Rated NI)❑ Eating facilities must have an appropriate number of chairs and tables to accommodate the number of

workers on break. (Rated NI)❑ Food preparation areas must have refrigeration units, heating units, and drinkable water. (Rated NI)

33

HEALTH & SAFETY


Rating If


Target

TimelineMethod

ZT

All exit doors are locked from the inside during working hours.

All exits doors must be accessible and unlocked at all times during working hours. Best practice is to install push bar doors that open outward, keeping the factory secure while also allowing easy exit.

24 hours

ZT

The factory’s drinking water is hazardous to the health of workers.

Factories must ensure drinking water does not pose a health risk. A water filtration system must be installed,with the water quality checked and verified as satisfactory.

24 hours

NMI

Some emergency exits are locked or obstructed.

All exits doors must be accessible and unlocked at all times during working hours. Best practice is to install push bar doors that open outward, keeping the factory secure while also allowing easy exit.

24 hours

NI

Factory does not store hazardous materials safely.

Chemicals and hazardous materials must be stored in a dedicated area suitable to withhold them.

Two -four weeks

NI

Boxes are in the aisle ways. Ensure boxes do not block stairs, aisles and exit ways.

24 hours

NI

Ear plugs are not issued to knitters.

The factory must issue appropriate Personal Protective Equipment (PPE ) to workers in all applicable areas and train workers on the importance of wearing PPE.

Two -four weeks


34

NON-DISCRIMINATION


Suppliers must not discriminate in employment practices, including recruiting, hiring and promoting qualified people of all backgrounds, regardless of sex, race, color, national origin, social or ethnic origin, religion, age, marital status, partnership status, pregnancy, parental status, physical or mental disability, political opinion, personal characteristics and beliefs, sexual orientation, gender identity or expression or any basis protected by local law. Refer to ILO Conventions 100 & 111.

SUPPLIER REQUIREMENTS❑ Factories must not discourage the employment of pregnant women, administer pregnancy

testing as condition of employment or expose pregnant workers to substantial health risks.(Rated ZT)

❑ Factories must provide workers equal wages, benefits, and privileges for equal work. (Rated ZT)

❑ Factories must have effective management systems to reinforce anti-discrimination policies. (Rated NMI)

❑ Workers must be able to practice religious rights during the workday as long as it is not disruptive. (Rated NMI)

❑ Factories must prohibit hiring or promotion decisions based on the use of contraception. (Rated NMI)

❑ Job advertisements, recruitment, hiring, promotions, and termination must be based on job performance and competency alone. (Rated NMI)

❑ Housing and food options must be of equal quality for workers of equal rank. (Rated NMI)

35

NON-DISCRIMINATION


Rating If

FoundExample Finding Example Remediation Target Timeline Method

DIA

As part of pre-employment

requirements, the factory

requires female workers to

submit a

medical exam that includes

pregnancy testing.

Factory must change its hiring process

and educate all hiring managers and

recruiting agencies.

24 hours

DIA

A clause in the labor contract

states, “workers will commit to

not becoming pregnant or marry

in the first year of employment.”

Factory must update its labor contracts

to remove this statement.

One week

DIA

Migrant/foreign migrant workers

are discriminated against.

The factory must meet the legal

requirements for all workers regardless

of immigration status or country of

origin.

One week

NMI

The factory posted a vacancy

opening at the factory gate that

read: “Wanted: Single, Hindu

Male sewer.”

The factory must remove

discriminatory requirements for

recruitment immediately

and institute a policy prohibiting any

form of discrimination. The factory

must communicate the updated policy

to Human Resources and staff.

One week

NMI

Per the law in country “X”,

pregnant women are not allowed

to perform overtime.

In factory “X” pregnant workers

request overtime and the factory

allows.

The factory must meet the legal

requirements. The factory should

communicate with identified workers

about the legal requirements.

One week

NMI

During worker interviews, female

workers acknowledge job

duties/tasks are not modified for

pregnant workers.

The factory must institute a policy that

modifies work for pregnant workers

from heavy job duties/tasks

immediately. The factory

must communicate the updated policy

to Human Resources and staff.

One week


36

FREEDOM OF ASSOCIATION


Suppliers will respect all workers' rights (regardless of gender) to freedom of association and collective bargaining. Refer to ILO Conventions 87, 98, and 154.

SUPPLIER REQUIREMENTS❑ Factories are prohibited to have or contribute to a “blacklist.” (Rated DIA)❑ Factories must respect workers rights to freedom of association and collective bargaining. (Rated NMI)❑ Factories must respect workers rights to join an organization of their choosing without fear of retaliation or

negative consequences. (Rated NMI)❑ Factories must provide a confidential means for workers to report concerns to management and/or worker

representatives, and factory management must follow up to such concerns accordingly. (Rated NMI)❑ Factories must allow workers to elect their own representatives and freely access them per local law. (Rated

NMI)

❑ Best practice: Survey employees for direct feedback

Rating If


Target

TimelineMethod

ZT

The factory uses or

contributes to a "blacklist" to

discriminate in recruitments

of workers.

The factory must stop using and/or

contributing to the "blacklist" immediately.

24

hours

NMI

The factory does not adhere

to the labor and/or collective

bargaining agreements.

The contract, benefits and wages of the

association must be recognized and

guaranteed by the factory.

1 week

NI

Workers are not actively

involved in factory

committees which could

improve their safety of

workplace environment.

Workers should be involved in improving and maintaining the quality of the factory through health and safety committees, elected by their peers, and have access to a suggestion box to report issues and concerns to factory management.

Three

months

NI

The factory fails to grant

workers the freedom to join

associations or comply with

the association's contract;

failure to request worker

organization activities; or

failure to create an

environment free of reprisal if

workers unionize.

Workers must be given the option to join an

organized association without consequence,

job loss, or retaliation. Workers must also

have the right to meet and discuss

workplace issues in the factory during

breaks and before and after work. They may

communicate their concerns about factory

work conditions or practices to

management or choose representatives to

organize workers, inspect conditions,

engage in dialogue with factory

management, so long as it does not disrupt

factory production.

Three

months


37

FREEDOM OF ASSOCIATION

GRIEVANCE FLOW CHART EXAMPLE

Worker Suggestion Box

Problem

Line Supervisors or Worker Committee

Issue Solved

Continue Working

HR Department

Meeting unit worker and

analysis

Final Results

Production Floor

Manager

No Solution

No Solution

Shift Manager

HR and Factory

Manager

No Solution

Final Results

Issue Solved

Continue Working

Issue Solved

Continue Working

Issue Solved

Continue Working

38

ENVIRONMENT


Suppliers must comply with all applicable environmental laws and regulations in the country of operation. In addition, suppliers must have policies and procedures in place to manage and minimize environmental impacts to energy, air, emissions, waste and water, and to safely store, prevent or mitigate releases of chemicals and hazardous materials.

SUPPLIER REQUIREMENTS❑ Factories must maintain valid environmental certificates and permits, including with Publicly Owned Treatment

Works/Municipal Wastewater Treatment (POTW), Industrial Park, third-party recycling and sludge companies, etc. (Rated ZT)

❑ Factories must actively manage waste removal to prevent illegal dumping. (Rated DIA)❑ Workers must wear appropriate Personal Protective Equipment (PPE) at all times when working with chemicals.

(Rated NMI)❑ Each chemical described in the Material Safety Data Sheets (MSDS), must be in the local language. (Rated NI)❑ Material Safety Data Sheet (MSDS) training must be provided on an ongoing basis and documented for each

chemical used. (Rated NI)❑ Factories must provide workers ongoing training and communication on emergency management and the safe

use of chemicals. (Rated NI)❑ Factories must consolidate similar chemical agents. (Rated NI)❑ Factories must implement a chemical inventory control system to minimize waste. (Rated NI)❑ Chemicals and hazardous materials must be stored in a suitable area in a chemically safe secondary container.

(Rated NI)❑ Factories must substitute non-toxic materials whenever possible. (Rated NI)❑ The path to eye wash stations must be clear at all times and located in all areas where chemical contact may

occur. Eye wash stations must provide a minimum of 15 minutes of continuous flow, operate hands-free/blindly, and be inspected regularly. (Rated NI)

❑ Factories must comply with local law when operating generators. (Rated NI)❑ Palm oil, and palm-containing derivatives are prohibited in the use of Nordstrom Product Group products.❑ Sandblasting is prohibited on all Nordstrom Product Group products.*❑ Nordstrom Product Group prohibits knowingly sourcing from ancient and endangered forests, endangered

species habitat and/or illegally logged forests for raw materials.* ❑ The Restricted Substances List (RSL) published by the American Apparel and Footwear Association (AAFA), sets

concentration limits for substances in materials or finished products to comply with product regulation and safety: http://www.wewear.org/industry-resources/restricted-substances-list/english/. Though only a limited number of these banned and / or restricted substances are tested as part of the Nordstrom Product Group Product Integrity program, suppliers are required to monitor and comply with the RSL.*

Rating Example Finding Example Remediation Target

Timeline

Method

DIA

Factory is found dumping

chemicals and/or wastewater

into the water supply.

The factory must comply with local

law by disposing of waste correctly.

Possible termination of relationship.

24

hours.-

Three

months

NMI

It was noted during the audit

that the factory’s

environmental authorization

was expired.

The factory must comply with local

law by having a valid environmental

authorization.

One

month


http://www.wewear.org/industry-resources/restricted-substances-list/english/

39

CONFLICT MINERALS & THE KIMBERLY PROCESS


SUPPLIER REQUIREMENTS❑ Suppliers must guarantee that columbite-tantalite, also known as coltan (from which tantalum is derived);

cassiterite (tin); gold; wolframite (tungsten); or their derivatives (collectively, 3TG) are sourced from conflict-free smelters. Suppliers must identify products that include 3TG or any other mineral or its derivatives determined by the Secretary of State to be financing conflict and trace these minerals to the level of smelter(s) or refiner(s) to identify country of origin to determine whether any such minerals originated in Democratic Republic of the Congo or an adjoining country (including Angola, Burundi, Central African Republic, Republic of the Congo, Rwanda, South Sudan, Tanzania, Uganda, and Zambia, collectively, the “Covered Countries”) or are from recycled or scrap sources.

❑ Suppliers must complete annual surveys, by the deadline provided in the email notification, to declare if products produced for Nordstrom Product Group contain, or do not contain, Conflict Minerals.

❑ Suppliers must provide proof of warranty and country of origin from their sources of merchandise. Country of origin documentation could include bills of lading, purchase orders, packing and inventory lists, incoming material records, production records, raw material certifications and supplier’s representations regarding the country of origin.

❑ All products are required to be reported on if:❑ Nordstrom is importer of record; or❑ Nordstrom Product Group designed and developed products or Nordstrom Product Group ‘tweaked’ or re-

designed products; or❑ 3TG is necessary to functionality or production of a product (even if only trace amount).

❑ Exemptions to the rule: ❑ 3TG is from recycled or scrap materials (in which case supplier shall provide Reasonable Country of

Origin Inquiry [RCOI] as required in the Conflict Minerals Template).❑ 3TG that appears in “ornamentation” on the product and is “not necessary to the functionality” of the

product.❑ 3TG that appears in packaging, labels and hangtags and is “not necessary to the functionality” of the

product.❑ Suppliers must guarantee that all diamonds are conflict-free, based on personal knowledge and/or written

assurances provided by the supplier of the diamonds. Physical invoices received by Nordstrom must include a written statement of supplier’s compliance with Kimberly Process resolutions.

❑ If at any time factory stops producing for Nordstrom Product Group but produced for Nordstrom Product Group in that calendar year, the reporting requirement still applies.

❑ Non-compliance to this requirement may result in serious consideration of termination of business relationship with Nordstrom Product Group.

For more information, please visit http://www.sec.gov/News/Article/Detail/Article/1365171562058.

Suppliers must comply with applicable laws and regulations relating to responsible sourcing, including the sourcing of Conflict Minerals and diamonds. Section 1502 of the Dodd-Frank Act relates to the responsible sourcing of Conflict Minerals, which include: tin, tantalum, tungsten and gold (collectively "3TG") mined in conditions of armed conflict and human rights abuses in the Democratic Republic of the Congo (DRC) or its adjoining countries. Under Section 1502, applicable suppliers must confirm the source of 3TG used in their products. Suppliers agree to satisfy any reporting requirements they have under Section 1502 and to also provide information requested by Nordstrom so that Nordstrom may satisfy its reporting obligations under Section 1502. The Kimberley Process resolution relates to the responsible sourcing of diamonds and requires that the supplier guarantees that diamonds are conflict-free based on personal knowledge or a written guarantee provided by the supplier of the diamonds and stated on all invoices. See our Conflict Mineral Policy (PDF).

http://www.sec.gov/News/Article/Detail/Article/1365171562058

http://i.nordstromimage.com/images/default/shop/image/shops/cares/2015/0222/Nordstrom-conflict-minerals-policy-statement.pdf

40

ANIMAL WELFARE


Suppliers must adhere to codes of practice that meet or exceed International, National and State Government, and best practice standards for animal welfare. Nordstrom will no longer sell products made with genuine animal fur or exotic animal skins by the end of 2021. See our Exotic Animal Skin and Fur Free Policy for more details.

SUPPLIER REQUIREMENTS

Leather❑ No NPG product will ever come from animals that have been raised and/or slaughtered exclusively

for their skins

❑ No skins are allowed from endangered or threatened species

❑ No exotic skins are allowed such as (but not limited to): alligator, crocodile or lizard

❑ Leather skins for apparel products from China, India and the Amazon Biome are prohibited. Leather

skins can be processed and constructed in China or India

❑ NPG supports the use of sustainable substitutes to animal derived materials

❑ NPG encourages the use the Leather Working Group certification to all its suppliersFur❑ The use of real fur is prohibited

❑ The use of pony and calf hair is prohibited

❑ Faux fur is acceptable as long as it is properly labeled as faux fur

Angora & Mohair❑ Angora rabbit hair is prohibited

❑ Mohair is prohibited unless it is certified as sustainably and ethically sourced

Down & Feathers❑ Since 2020, NPG only accepts down certified by the Responsible Down Standard (RDS).

❑ All feathers from live-plucked or force-fed birds are prohibitedWool❑ NPG encourages its wool suppliers to use the Responsible Wool Standard (RWS) certification

❑ NPG is phasing out the use of mulesed wool

Cashmere❑ NPG suppliers are encouraged to join the Sustainable Fiber Alliance

❑ NPG supports the use of recycled cashmereTesting❑ Testing cosmetics on animals is prohibited.

The following are values that Nordstrom Product Group has set in regard to sourcing our materials used in the development of our products:

All animal derived materials used by Nordstrom Product Group must come from animals that have been treated and raised ethically, responsibly and with care based on the “Five Freedoms.”

41

INTELECTUAL PROPERTY


Nordstrom respects the intellectual property (IP) rights of others and expects the same of its suppliers. Unauthorized use of any third parties' intellectual property, including copying of third parties’ designs or prints, is not acceptable. Any authorized use of another's IP and the transfer of proprietary information must be handled in a secure manner that protects the IP and rights of the IP owner, Nordstrom and its suppliers. Nordstrom’s trademarks, logos and proprietary work may only be used to fulfill contracted services and shall not be released to any other party unless preapproved in writing by Nordstrom.

SUPPLIER REQUIREMENTS❑ Nordstrom respects the intellectual property rights of others. All merchandise provided to

Nordstrom by the vendor and any trademarks, logos, and designs, including print patterns, that may be incorporated in or part of the merchandise should not infringe on the intellectual property rights of others, including trademarks, trade dress, copyrights, design patents, patents and other proprietary property rights. This means that vendor owns, has created or has permission to use any intellectual property that is incorporated in or part of the merchandise provided to Nordstrom.

❑ Nordstrom values and protects its name, trademarks, logos and creative works. The Nordstrom name and all other trademarks, logos and other creative work owned by or licensed to Nordstrom may only be used with Nordstrom’s permission to produce merchandise ordered by Nordstrom. Those names, trademarks and/or logos must be removed from any and all merchandise before it is sold to another party, including but not limited to overages or returns, no matter the reason for the return. In addition, any merchandise bearing or incorporating any print designs, patterns or any creative work provided by, owned by, or licensed to Nordstrom cannot be sold to others and must be destroyed, including but not limited to overages and/or any merchandise in the vendor’s possession that bears such designs, patterns and/or creative works that are not sold to Nordstrom.

❑ Nordstrom prohibits manufacturers and suppliers from using the Nordstrom name or the name of any of Nordstrom’s private brands for any purpose other than to produce merchandise solely at Nordstrom’s request.

❑ Failure to strictly adhere to the above Partnership Guidelines will result in termination of all purchase orders and/or the return of any merchandise that is the subject of alleged infringement. Nordstrom reserves the right to pursue all allowable legal measures to seek enforcement and restitution, equitable and otherwise, for any failure to comply.